MassHealth Reform Revisited in Governor’s State Budget Proposal

Last Wednesday, Governor Charlie Baker released a $40.9 billion FY19 state budget proposal, which, among other items, contains a 1.3% increase to the MassHealth budget based on the assumption that there will be a 1.2% increase in MassHealth enrollment.

Also included in the budget is Baker’s re-introduction of his earlier proposal to move 140,000 non-disabled adults with incomes above 100% of the federal poverty level (FPL) out of MassHealth and into subsidized insurance through the Health Connector exchange. The administration is seeking federal approval of the proposal through a recently filed MassHealth waiver.

According to EOHHS, the proposal assumes that a Connector plan will expand to include those up to 138% of the FPL, thereby allowing the affected individuals to maintain MassHealth-like out-of-pocket expenses. The proposal also assumes a MassHealth dental benefit for those in the plan – which currently is not available in the Connector. The change in Connector income eligibility and dental coverage would be achieved through the Connector’s rulemaking process. The FY2019 budget assumes this change will yield $60 million in net state savings given the effective date of January 1, 2019; factoring the federal share of the Medicaid program results in a $120 million benefit to the state.

While the Legislature chose not to enact this proposal last summer, MHA has noted to both the House and Senate its continuing support of the MassHealth-to-commercial-insurance shift. As part of its support, MHA has recommended added protections for enrollees’ out-of-pocket expenses and readily available access to coverage.

The governor’s budget would increase funding for opioid treatment and prevention and affects a number of other hospital-centric measures, ranging from MassHealth prescription drug financing and coverage proposals, to a new $168 million “Safety Net Provider Trust Fund” for hospitals that qualify for safety net provider payments under the terms of the current MassHealth waiver.

MHA’s budget focus now turns to the House Ways & Means Committee, which is expected to release its FY2019 budget proposal in mid-April.